Success today in the business world (whether as an employee, manager, executive, or self-employed businessperson) involves taking some risks. The systems that are changing the world today are very risky, but the payback is enormous (DeMarco & Lister, 2003). One needs to know how to manage risk, however, including how to identify risk sources, quantify risk parameters, and develop plans to handle risk; these are the topics covered in this chapter. Risks are inevitable in projects (particularly IT projects), and if a PM does not practice sound risk management, that PM may constantly be in a crisis-management mode. The high failure rate of modern large IT projects, such as those involving EAI/ERP, CRM, and SCM, is largely due to senior management and project management’s failure to assess risks up front and to mitigate the causes of the greatest risks at the start of the project (Gibson, 2003). An adequate analysis of potential risks can significantly increase the likelihood of success for a project and can justify dollar amounts set aside for management reserves. “Risk management is increasingly seen as one of the main jobs of project managers” (Sommerville, 2003).